Since Australia established formal diplomatic ties with the People’s Republic of China in 1972, the country’s fortunes have become increasingly linked to the Middle Kingdom. No Western country’s economy has benefitted more from China’s rise than Australia. Much of China’s unprecedented economic growth has been built with Australian iron ore and powered by Aussie coal and liquified natural gas. In a way, Australia’s resource traders blazed a trail for Australian exporters, teaching cultural lessons about doing business in China, and raising China’s profile as a destination for exports.

Since Chinese consumers have started entering the middle class, Australian brands have been relatively quick to make their goods and services available to them. Over the past couple of Singles’ Days, Australian products have been the third and fourth highest ranking country for product origin, even though Australia isn’t even in the top-50 countries by population.

Australia’s success in exporting to China always had pretty good odds. Australia’s relatively close proximity to China, in both flight time and time zones, makes it easier to get up to the market to do business. And unlike other major western economies, Australia doesn’t have a large domestic base or similar countries close by to send their wares, so it has always had to be a little more adventurous when prospecting for export markets. It is also the often-unthanked Chinese residents in Australia and visiting tourists who have helped promote many Australian things to their friends and family back in the Mainland. No country outside of Asia has more people of Chinese heritage per capita than Australia, on top of the 1.4 million Chinese who visited Australia last year.

Australia’s position as one of the pioneering, best practice and reliant exporters to China – balanced with its increasingly precarious stance on geopolitics – makes it one of the most important and interesting relationships to monitor in today’s globalised world. That’s why China Skinny was honoured to be back again this year working with Austcham Shanghai on the second annual Westpac Australia-China Business Sentiment Survey which launched yesterday in Sydney. The survey provides a platform to really understand how Australian businesses on the ground in China are faring in light of the geopolitical tensions and slowing economic growth.

To Australian businesses’ credit, we had 211 complete the survey this year – 33% more than last year. Overall, sentiment was down 6.7% from last year but remained largely optimistic – with 71.6% either optimistic or slightly optimistic about the next 12-months; 81.5% in their five-year outlook. The results also pleasingly demonstrated an increase in Australian businesses’ forecasting profitability in 2019 – a strong 78.9%, from 62.5% in 2018.

One of the promising findings from the survey was that Australian businesses appear to be maturing and realising that China is a market that requires tailored initiatives. 61.1% of businesses surveyed will offer unique products and services for the China market this year – and are 32% more profitable as a result.

Domestic consumption was again considered the most important opportunity for Australian businesses and is also being supported by 26.6% investing in market research and development – 10.7% more than last year. 74.9% have a digital strategy in place or in development, with 59.7% having one that incorporated ecommerce. For those businesses already selling online, they are selling on an average of 2.5 platforms, versus 2 last year. Almost a quarter of businesses surveyed are early adopters of New Retail, with 66.0% of these businesses experiencing a 10% rise in revenue and 55.4% benefitting from increased brand and market insights.

There’s many, many more interesting insights throughout the report. The results aren’t just a barometer for other Australian businesses exporting to China; they provide any company working in China with a great benchmark to understand the common challenges and opportunities. We’d recommend you download the report and see for yourself. You can get it by clicking/tapping here.

A special acknowledgement to our own Alexander Kelso and Austcham Shanghai’s Stephanie Smith, who have worked tirelessly behind the scenes to bring the survey to life. Go to Page 2 to see this week’s China news and highlights.

Perhaps even more surprising is that the Chinese company is not the well-known Tencent of WeChat fame, or even Alibaba (they were 15th on the list), but a mere $43 billion company, Meituan Dianping, which most people outside of China have never heard of, and probably can’t pronounce.

Meituan is best known for food delivery, restaurant reviews, hotel booking, movie tickets and acquiring bike share giant Mobike. The company topped the table for “pioneering transactional super apps” making the most profound impact on both industry and culture while showcasing a variety of ways to thrive in today’s volatile world. In the first half of last year, the company facilitated 27.7 billion transactions (worth $33.8 billion) for more than 350 million people in 2,800 cities. That’s 1,783 services every second of every day, with each customer using it an average of three times a week. The company leverages user consumption data, including price sensitivity, to recommend other services they’ll like, taking advantage of its consolidation of service offerings, much like China’s other all-serving tech giants.

One of Meituan’s core services, food delivery, is representative of one of the most exciting consumer developments that has been happening in China over the past few years. We’re not talking the meandering Postman Pat or the daily milk round, these are on-demand delivery services that can have everything from noodles and coffee, to meds and adult toys, delivered around the clock in less than 60 minutes, often in half that time. It is a service that plays to a Chinese consumer who craves convenience and possesses little patience.

Delivery in China takes advantage of its densely-populated cities, allowing a concentration of delivery people. In addition, the broadening of products being delivered that are core to the New Retail explosion means delivery is no longer just at meal times, or located around ecommerce logistic hubs. Instead, this revolution is creating economies of scale across wider geographies, spreading the costs of delivery workers throughout the day.

One of the most powerful innovations in delivery is what happens behind the scenes. Like many things in China, companies are utilising their enormous pools of data, and making sense of it with Artificial Intelligence. Meituan’s Smart Dispatch system, for example, calculates 2.9 billion route plans every hour to optimise the delivery for its 600,000 electric bike riders to pick up and drop off up to 10 orders at once in the shortest time and distance. Since Smart Dispatch launched in 2015, it has reduced average delivery time by more than 30%, and riders complete 30 orders a day, up from 20, increasing their income.

For brands selling in China, the penetration of delivery is another example of the unique way that Chinese consumers shop and their expectations. This and other distinct purchase behaviour in China should be factored into development of marketing strategies. China Skinny can assist with this. Go to Page 2 to see this week’s China news and highlights.

We have just passed the 200-day mark of the US-China trade war, and what a 200 days it has been! Whilst we are finally seeing some positive signs that an agreement could be imminent, there has been plenty of commentary about the beating that America’s reputation has taken in China.

There’s no discounting that the spat has sped up the rise of nationalism in China, and there are consumers who may have directed their spending away from American businesses, but the impact has been much less severe than it could have been.

One of the key differences between the US-China trade war and the disputes with Japan and South Korea is that the propaganda machine has not yet ramped up criticism of the US. China also hasn’t introduced regulations such as it did banning tour groups to South Korea. Such plays wouldn’t be well timed during the already-precarious trade negotiations with the US.

When an estimated 500 new products and services launch in China every day, separating your brand from the rest can be an endless struggle. Of course an informed and intelligent approach to the market is vital in driving success, but recent times have seen high-performing brands begin to move towards more collaborative methods to open up opportunities.

Some of China Skinny’s clients and other aspirational brands are increasingly opting not to tackle China alone. New trends, business models and changing influences and touch points are constantly emerging, giving rise to the effectiveness of partnerships. They have allowed brands to more easily build meaningful and emotional connections with their target markets by engaging and accessing new channels previously out of reach for them.

Like anywhere, partnerships in China allow plenty of scope for creativity and can produce much higher returns than mainstream marketing initiatives. Yet they should be well-considered, appropriately executed and kept relevant to both the existing consumer and those targeted to justify the investment and risks that come with such collaborations. Agencies such as China Skinny can assist in identifying and maximising such partnerships.

On another note, China Skinny’s Mark Tanner will be joining an esteemed line up of experts at The Secrets To Doing Business In China forum in Shanghai on Friday May 18. Mix and mingle with China-based businesses and a large delegation of visiting Australian businesses in town for the Aussie Rules and SIAL. For more details tap/click here. Go to Page 2 to see this week’s China news and highlights.

The strategies and recommendations that China Skinny developed five years ago were quite different than those we do today. When we cited the best examples of marketing in China, we would typically look to foreign brands. Back then, most domestic companies’ marketing plans were focused on price promotions and discounts.

Things have changed in recent years. The allure of overseas origins remains attractive with many Chinese consumers and there are some great case studies of foreign brands backing that up with a smart marketing strategy, yet our recommendations are increasingly drawing on lessons from domestic brands. We only need to look to the dairy category where imported brands have a natural perceived advantage for health and safety, yet domestic players still manage a 38% premium per litre for online sales. This is due to slicker marketing and usually a better understanding of the market overall. Our recent survey of Australian businesses with Austcham confirmed that exporters are increasingly waking up to this, with domestic brands seen as more of a source of competition than foreign brands – 50.7% versus 49.1%.

Traditional domestic brands are not the only source of local competition for foreign brands in China. One of the newest competitors to the mix are the key opinion leaders – the same folk that foreign and local brands are paying hundreds of thousands of dollars to endorse their brands. Just as George Clooney built his billion dollar tequila brand and Gwyneth Paltrow with lifestyle brand GOOP, China’s influencers are realising their value not just as endorsers of other brands, but to launch their own brands such as Zhang Dayi’s own fashion label and Mi Zijun’s snack shop.

The most potent new string of competition isn’t going to come from celebs though, it is likely to come from the platforms who are selling your brands themselves – China’s online giants who are becoming increasingly powerful in both the online and offline world. Although China have been late adopters of private-label brands, it is another area the big ecommerce platforms are likely to lead. Netease is the latest platform to launch its own private label, Yanxuan, selling clothing, furniture, and appliances from the same Chinese suppliers who manufacture for international brands like Kering’s Gucci, Burberry, and Deckers’ UGG. It follows Taobao’s Xinxuan which launched last year, and JD’s Jingzao in January.

The ecommerce platforms have the data to evaluate the attractiveness of the private label products coupled with the ability to test them with little risk. Just look at the 80,000 smelly Thai durians Alibaba sold in a minute. While Alibaba may be best known for its multi-billion-dollar acquisitions such as RT Mart and food delivery Ele.me, it is making plenty of smaller purchases that could add to its arsenal of home brands such as NZ dairy company Theland. Some would say it could be a conflict of interest, particularly given Alibaba’s ability to dial brands on and off, but it is the inevitable reality of supplying dominant retailers much like supermarket chains in the West.

New sources of competition all cement China’s position as the most competitive marketplace on the planet. Even categories that have been out of reach of domestic players such as the auto industry are now starting to see more and more threats from hungry and smart domestic brands – both Alibaba and Tencent have made notable investments in car manufacturers. Brands should be aware of who their competition is in order to carve out their unique place in the market and not become too reliant on one channel. Agencies like China Skinny can assist with such market mapping, gap analysis and differentiated branding and positioning. Go to Page 2 to see this week’s China news and highlights.

Earlier this month JD launched its first 7FRESH, a 4,000 square metre grocery store in Beijing that follows many of the new retail concepts from Alibaba’s Hema stores. JD heralded the supermarket the first of 1,000 stores that could open in the next three to five years. Hema also plans to significantly ramp up its presence, with 2,000 stores planned over the same period.

The focus of 7FRESH is a “personal and educational” hands-on shopping experience including “magic mirrors” that sense when customers pick up a product, and display product information such as nutritional facts and origin. JD also plans to introduce smart shopping carts allowing consumers to shop hands-free, which will be particularly helpful for shoppers with kids in tow. Facial recognition allows shoppers to check out and pay using the technology, able to walk out directly with the purchases or have them delivered within 30 minutes.

It is part of the growing new retail trend in China which has seen online giants shake up the bricks & mortar scape by creating richer, more convenient shopping experiences which drive significantly higher sales than traditional retail stores. Much like Alibaba’s Hema, JD is using big data from its 266.3 million shoppers to help craft the experience.

Physical stores still account for more than 80% of China’s retail overall and well over 90% of grocery sales, so JD and Alibaba’s battle for supremacy will be interesting to watch. Unlike the pure ecommerce world, where Alibaba has significantly higher margins by farming out most marketing, stock holding, fulfilment and customer service to brands, in the physical world it will be operating a more ‘full service’ model like JD.

Walmart – the world’s largest company by revenue – owns 12% of JD and is likely to provide insights and support to 7FRESH from its wealth of retail experience including 22 years in China. It will not only help Walmart gain traction in China’s previously elusive ecommerce and new retail segments, but it will also provide plenty of learnings to roll out in its Walmart stores in China, and potentially to its stores in the US and globally.

In short, there is no better player than JD to take on the mighty Alibaba in the new retail game. Two hungry, data-focused, well-funded and well-oiled players, and a host of other competitors, will ensure the rate of innovation in China’s retail segment will continue to dazzle. It will also create another segment where China is likely to lead the world and possibly export its systems globally. New retail in China is happening, and happening fast, and brands that best understand and embrace it are most likely to succeed in the years ahead.

Who are China Skinny? We are a marketing agency on the ground in Shanghai conducting research, building strategies, and executing them for over 100 multinational brands both big and small, across 20 categories. What’s your biggest China problem? Contact us to see how we can help. Go to Page 2 to see this week’s China news and highlights.

Back in 2012 scouring content for the Skinny, it seemed almost every week there was another article praising KFC’s success in China. It was the Western pin-up brand; finding the much sought-after balance that tempted the masses with its alluring foreignness, but localised its offerings just enough to appeal to Chinese tastes – with the menu sporting old favourites like congee.

For every 10 bucks spent on fast food in China, KFC accounted for 4. It had almost 4,000 restaurants, with another 16,000 planned. There were movie placements, celebs munching on drumsticks, lovebirds courting one another over buckets … then Bird Flu and a series of scandals happened.

KFC has never really recovered from the dark days of ’13. In 2014 the menu was ‘overhauled’ for the first time in 27 years, there’s been a refresh of some decor, but if you were to go into most KFC restaurants in China they still bear a stark resemblance to the golden years pre-2013. China, Chinese consumers, and their tastes on the other hand have changed – dramatically. A simple scan of restaurants on Dianping or a stroll through a city mall or restaurant street and it becomes clear that there has been an evolution in China’s hospitality sector. La Liste’s annual ranking of the world’s restaurants noted the big trend is the rise of restaurants in China who are meticulously preparing and presenting food, and charging real money for it.

Contrast KFC with another mega-chain from America – Starbucks. Over recent years, the coffeehouse chain has constantly adapted to Chinese consumers and their ever-shifting expectations for newer, shinier offerings. They have played well to Chinese consumers’ inherent need for status from what they purchase, opening cafes in highly visible spots in city streets and premium office building foyers where they will be seen sipping on their Green Tea Crème Frappuccinos. The look and feel of cafes have also evolved to keep up with changing tastes, with some of the latest cafes having fit outs that wouldn’t look out of place against some of the fine dining establishments on Shanghai’s Bund.

Starbucks has always played to Chinese love of all things digital and typically been an early adopter and innovative user of technology. In the early days of WeChat, it cleverly used the limited functions by encouraging fans to send emoticons reflecting their mood, receiving a short music clip related to that mood. A little later in the game they accepted WeChat Pay with some alluring features such as the ability to gift friends and family a drink or two.

Last week’s launch of Starbuck’s mega reserve roastery in Shanghai is one of its most exciting initiatives yet. In addition to a beautiful fitout, complete with contemporary Chinese elements, the venue plays true to the ‘New Retail’ movement that is fast making its way into the bricks & mortar landscape. Integrating the Taobao app, augmented reality brings Starbuck’s story to life in a format that China’s millennials love. The app also allows them to skip the queue and buy merchandise, which improves both customer experience and the likelihood of increased sales and advocacy purchases.

Much like KFC was before 2013, Starbucks has become a much-cited case study – with good reason. It illustrates how brands can successfully keep up and stay relevant to the ever-changing needs of Chinese consumers through offline and online initiatives and product offerings. Their lessons don’t just apply in the hospitality trade, but are applicable for any foreign or local brand trading in China. Go to Page 2 to see this week’s China news and highlights.

The big bull of ecommerce festivals comes charging into town this Saturday to much anticipation. Singles’ Day and the week that follows will see millions of frenzied electric scooters ferrying an estimated one billion deliveries to offices and apartments across the mainland. If you wanted proof that the Chinese consumer has become a force to be reckoned with, then this is it.

Purchases during the 24-hour period and presales represents over one-fiftieth of China’s annual ecommerce sales, with some brands even making half of their annual turnover on the day. However, many sellers will not make a dime from it. For a number of brands it is an opportunity to accumulate much-needed sales numbers and consumer reviews which are vital to Alibaba’s, JD’s and other platforms’ search results algorithm. It’s also important for consumer perceptions given they are much more likely to buy products that already have sales histories and glowing reviews, further emphasising the need for top notch end-to-end service, even with the added volume from the festival.

Although consumers are very much in a spending mindset, it is not just a case of throwing up a promotion on Tmall and expecting the masses to tap ‘buy’. There will be 140,000 brands – including 60,000 international ones – promoting 15 million products during the festival, so much like the rest of the year, smart marketing tactics will help.

Alibaba has taken the day from just being an online shopping fair to an annual celebration firmly cemented in the festival calendar, arguably the one that generates the most buzz after the Spring Festival-Lunar New Year celebrations. Its evolution to an entertainment-focused event has been vital to its continued growth. Every year, countless pundits have commented that its growth rates couldn’t continue, but with every 11.11 it continues to soar, growing 32% last year to $17.8 billion. This year is likely to be tougher for such growth, with consumers already showing fatigue from the endless ecommerce festivals playing on word associations with dates and China’s festivals. But falling on a Saturday will help, particularly with the entertainment and brick & mortar focus is likely to see sales figures continue to climb.

For a consumer who has been conditioned to expect more glitz and lights with each subsequent promotion, Alibaba has to deliver an ever-more engaging experience. Alibaba is following many of the themes from last year, with big name celebs herded together in a TV countdown gala again directed by David Hill. Tapping into China’s growing love for hip hop, Pharrell Williams will be making the trip to Shanghai’s Mercedes Benz Arena to perform and give the inevitable fly hand gestures and selfies with Jack Ma. ¥250 million ($37.7 million) worth of hongbaos (red envelopes) will also be there to sweeten the deal.

If your brand is participating in 11.11, we wish you success and sustained growth following the event. If you’re shopping on the day, we hope you find some good deals and are entertained.

In other news, China Skinny is seeking a smart, passionate marketing manager to join our all-star line up in central Shanghai. If you or a friend is looking to be titillated during working hours and learn oodles about China marketing and consumers, please let us know. Click here for more information. Go to Page 2 to see this week’s China news and highlights.

Welcome back to our China-based readers; we hope Golden Week panned out well.

China’s dynamic startup scene typically takes a consistent path. New ideas usually follow innovations that have been successful overseas, then quickly morph to serve the unique needs of Chinese consumers; capitalising on the distinct ecosystem of embedded mobile payments, devout smartphone usage and lack of privacy concerns.

Over the past few years China has been awash with investment capital, and with so much money sloshing around these startups can shower consumers with subsidies, discounts and freebies ensuring they get hooked. What follows is a war of attrition, where startups fiercely compete with incentives, burning through cash with unprofitable business models until the less-resourced competitors fall away or are swallowed up by a better-funded player. Mergers and consolidation always follow with the winner usually taking all.

Fortunately China’s tech scene isn’t just evolving to one big network of monopolies. Some areas are still passionately contested driving innovation and deals for consumers. In what would be a surprise to many, Baidu isn’t the leading search tool in China for products. In mature categories such as online travel there are flourishing niche sites that can be better-targeted than the leader. In ecommerce, less price-sensitive and more sophisticated consumers tired of trawling through the expanses of Alibaba’s platforms often swap to niche platforms in areas such as luxury, food and cross border, where Alibaba accounts for just a third of sales. Brands would be wise to consider them.

With so much potential, there has been a significant uptick in brands across the spectrum of fitness, health and nutrition-related categories. Many are becoming more sophisticated in how they appeal to Chinese consumers, following some of the successful strategies from other segments in China and abroad – such as fitness personalization and technology integration.

Like most countries, the fitness movement still has a long way to go before it will woo everyone. In recent weeks in an unnamed city in Hubei province, more than 55% of the 1,233 youngsters who tried out for the army failed. One 20-year veteran of the tests noted a significant decline in fitness levels during his tenure.

The beneficiaries of a more fitness-focused China won’t just be the obvious categories. Brands involved in tourism, food and beverage, entertainment, clothing, accessories and others should explore if and how they can tap into the trend. It will only get bigger, particularly among the affluent segments. Agencies such as China Skinny can assist with some exploration. Go to Page 2 to see this week’s China news and highlights.

Next time you indulge in a good hearty serving of ravioli or fettuccine, spare a thought for the Chinese. Tracing the origins of Italian pastas will likely find you in China in the 13th century, following the routes of Marco Polo who brought back tales of dumplings and noodles from his epic adventures in the Far East.

Similarly, the European colonists who amassed incredible wealth from faraway lands discovered by compasses of Chinese design; planned, mapped and recorded on paper of Chinese roots; and conquered with the help of weapons resulting from China’s invention of gunpowder.

After a short hiatus, China is again making its mark on one of the most significant innovations of modern times – the mobile phone. The cradle of the smartphone isn’t China, but the other side of the world in Manhattan, where it was made by a Motorola employee named Martin Cooper. That was 1973 and it took a few decades before China really entered the mix.

Firstly, Motorola is now owned by China’s Lenovo, a move echoed across many industries as Chinese companies acquire patents, technology and brands to expand their global aspirations.

Thirdly, many of China’s manufacturers have migrated from cheaply manufacturing devices for foreign brands, to utilising their engineering capabilities to produce their own brands, some with world-first innovations. Much like the Italians did with noodles and dumplings, Chinese are bringing their own form of mobiles to the world. China’s brands now account for almost 1 in every 2 smartphones sold globally, and are on track to be in the hands, pockets and purses of the vast majority of cellphone users around the world within a few years.

Chinese consumers are well aware that influencers are rewarded for endorsing brands (in addition to ‘tips’ from fans). Despite this, their social media broadcasts have become some of the most authoritative and trusted sources for information.

One of the reasons for this can be traced back to 2011 when two of China’s new fast trains crashed, killing 40 people. While state media attempted to cover it up, consumers posted about it as it happened on Weibo, which was the primary social channel at the time. This had two notable consequences: 1. Chinese began to trust what they read from reliable sources on social media much more than traditional state-run media channels like TV, radio and print; and 2. Beijing, having already lost a lot of face from the Weibo reports of the train crash and subsequent citizen exposés and protests, saw the need to wrestle back influence from the people.

On the subject of marketing strategies for China, our US-based readers in the Bay Area should consider attending the Export 101 Series on Thursday July 20 in San Jose. China Skinny’s Ann Bierbower will be sharing wisdom, joining the US Department of Commerce, DHL Express and the CalAsian Chamber at the event. Register here. Go to Page 2 to see this week’s China news and highlights.

A glance at any air quality index will reveal that China’s notorious pollution problem persists. Yet while Washington wavers on its environmental commitments, Beijing is implementing policies to reduce its reliance on fossil fuels, investing trillions of yuan into renewable energy and improving smoggy cities, toxic waterways and filthy farmland.

Government policy, regulations and investments are in no doubt vital to improving both China and the world’s environment. Yet within China lies a much more potent force that remains relatively untapped – its 1.4 billion people. The mobilisation of even a small share of Chinese consumers will have immeasurable long-term benefits for the environment.

For the most part, Chinese consumers still largely leave the responsibility of fixing the environment to the Government. The product of a system that couples consumers’ belief that all-powerful Beijing will solve its macro problems and the futility of trying to make a difference as 1 of over a billion people. The odd beacon of hope emerges to educate and engage the masses, the most notable being the Under the Dome documentary. Initially promulgated by the Government it spread like wildfire before being banned just days later.

Alibaba has also driven some initiatives. On one side, it has led the rise of ecommerce in China which is creating significant emissions through packaging, delivery folk and a host of other factors. So to help counter that, the company is using its scale and reach to make positive change environmentally. In 2014 it aimed to build awareness and participation about China’s water pollution but achieved limited coverage. Late last year it launched its Ant Forest Program which uses its established base of 450 million Alipay users to build awareness about carbon footprints, deforestation and planting trees.

In just 9 months the initiative has attracted 200 million users to gamify their carbon footprint tracking. Users are awarded “green energy points” with scoring based on how environmentally friendly a purchase is – such as paying a bill online instead of travelling to a store to do it, or buying a metro ticket instead of fuel for a car. Points allow users to grow virtual trees. They can invite, share and compete with friends in their tree-growing escapades. Virtual trees can be converted to real trees, which saw over one million trees planted by the end of January 2017.

The Ant Forest Program is a step in the right direction to engaging mass awareness as to how individual behaviour can impact the environment. It also provides a few takeaways that can be applied to marketing strategies that aim to engage with Chinese consumers. The first is the gamification of the initiative; making the whole exercise fun, fuelling consumers’ craving for mobile entertainment. The next is the social aspect; the ability to share, invite and build status amongst peer groups. The social factor drives the sense of gratification from doing something they think good. Lastly, using an already-established app with little effort to partake offers the chance to feel like they are making a difference with a minimum of effort.

The initiative also highlights how apps such as Alipay have evolved from one-dimensional payment tools, to much wider social, interactive and marketing platforms. We obviously see it with WeChat, and a host of other apps such as Ctrip, which is not just a holiday booking tool but a powerful communication channel for reaching Chinese tourists on holiday, to health apps that can be used to promote food and lifestyle products. They are all good channels to consider when developing a marketing strategy for China – we can help with that! Go to Page 2 to see this week’s China news and highlights.

Years ago, China’s sprawling network of street-noodle vendors began utilising the curious new commerce features of an app called WeChat. A willingness to embrace change signifies the innovative spirit that pulses through modern China. From those polystyrene bowls of late-night fry up all the way to billion-dollar-plus bike loan schemes a now near necessity in the lives of many Chinese, there is no shortage of inspiring innovation coming from the Middle Kingdom.

China’s rich history spans 5,000 years. Yet few periods have seen the velocity at which China has evolved as these 4 decades past. In a little over a generation Chinese consumers have seen mass urban migration, internationalisation, globalisation, a fast-track to modernity, the effects of a one child policy and steady episodes of cultural upheaval and redirection. Moulded by constant flux, the resultant consumer class is not only unfazed by change but expects and embraces it.

WeChat payment is one example. The seamless purchase of goods, services and content that can be integrated almost anywhere online and offline has opened the door for infinite new ways to buy and consume things. Similarly, live streaming, virtual reality and augmented reality from innovators like Alibaba has merged with ecommerce.

Yet innovation in China spans far beyond the well-known smartphone apps and ecommerce platforms. China Skinny is seeing it across every piece of the marketing mix. From packaging to pricing models, brands are localising best practice from overseas, and some even innovating in a way that is native to China.

Chinese consumers find subscription models attractive for a number of reasons. Van Diemen’s Land’s subscription to fly in fresh milk from Tasmania ensures a stable supply of healthy, tasty, fresh milk for those families aware of the benefits of drinking it. Another interesting initiative is the Drinking Buddies scheme which sends members a box of six different craft beers every month and offers access to tastings and workshops. It appeals to craft beer drinkers as they can try niche beers that they may not have been able to get elsewhere – something that China’s craft beer enthusiasts crave. It’s a great low-cost way for the brand to get in front of grassroots influencers who will gain social credit from sharing new undiscovered beers among their beer drinking friends.

Any classic “Business in China 101” course will be quick to mention the traditional two-handed business card delivery. Yet like much else in modern China, these lessons are quickly losing relevancy. While formal business events will see the obligatory business card exchange, many Chinese won’t even carry a business card to everyday meetings, instead opting for a simple scan of a WeChat QR code.

This changing habit was quantified in last week’s release of the 2017 WeChat User & Business Ecosystem Report by Tencent’s Penguin Research. The study found of WeChat’s 889 million monthly active users, 83% use it for work. One of the most notable changes from the 2016 report is the number of contacts users have. In the space of 12 months, the average increased from 128 to 194. 57% of new contacts are work-related and 44% of users have more than 200 contacts.

While the 26-35 age bracket remains the most dominant, it isn’t solely the youngins in the office who are using it. Age distribution has shifted from previous years, with a greater share of all users now in the 26-60 age group.

The relevancy of this news is clear not only for B2B companies, but also B2C brands. The importance of B2B communications is often underestimated by consumer brands. There are very few in China who don’t need education channels and the means to keep their products and services top of mind with agents, distributors, front-line staff and other partners.

Whilst WeChat may be the channel of choice for many business people, it isn’t just a case of saturating personal Moments feeds with information. The preference for seeing work-related content on Moments dropped from 33% to 23.6% over the past 12 months. The beauty of WeChat is that it allows a plethora of functions to be built in, enabling everything from stock ordering and management to tutorials and quizzes, and much, much more. These functions can help in making any work-related content not only palatable but interesting, engaging and scalable. Any marketing strategy should consider the all-important B2B channels, something that agencies like China Skinny can assist with. Go to Page 2 to see this week’s China news and highlights.